How Does Tawarruq Function In Islamic Trade Finance Deals? - Halal Finance Guy

Описание: How Does Tawarruq Function In Islamic Trade Finance Deals? Are you curious about how Islamic trade finance manages liquidity needs without involving interest? In this video, we explain the process of Tawarruq, a method used by financial institutions to provide cash while adhering to Islamic principles. We cover the step-by-step process, starting from the initial commodity purchase to the final sale to a third party, highlighting how each transaction is conducted at fair market value and in a transparent manner. You’ll learn about the types of commodities used, the role of contracts like Murabaha, and how the process ensures compliance with Shariah law by avoiding prohibited practices such as riba and inah. We also discuss the common applications of Tawarruq, including personal financing, working capital, and liquidity management, especially for clients lacking collateral. Additionally, we address some of the concerns raised by scholars regarding prearranged transactions and how many Islamic finance institutions view Tawarruq as a practical solution within Islamic rules. This video aims to clarify how Tawarruq functions as a trade-based financing method, enabling customers to access cash through genuine commodity sales while staying compliant with Islamic trade finance rules. Whether you're a student, professional, or just interested in Islamic finance, this guide provides clear and straightforward explanations to help you understand Tawarruq better.

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About Us: Welcome to Halal Finance Guy! Our channel is dedicated to demystifying the principles of Islamic finance and guiding you through topics like Shariah-compliant banking, the prohibition of riba (interest), halal investing, and zakat and charitable giving. We also cover key subjects such as Islamic financial contracts like Murabaha, Ijara, and Mudarabah, along with discussions on sukuk (Islamic bonds), Islamic savings accounts, business ethics, and Islamic home financing. Our approachable format aims to make these concepts accessible and understandable for everyone.